Boycott fears cause two foreign bidders to drop out of ports tender
The deterioration of Israel’s international standing has been evident this week as at least two leading international companies bidding to build private seaports here dropped out of the government’s tender due to concerns over the political repercussions.
Royal Boskalis Westminster, a Dutch operator of ports that had submitted a proposal under the name Holland Terminal in the prequalification stage last December, dropped out shortly thereafter. More recently, Italy’s Condote de Agua withdrew after passing the prequalification process.
The companies that had initially expressed their interest in the PQ stage last April made their decisions to drop out in recent months as boycott pressure on Israel has grown. The deadline for submitting bids was Monday.
In addition to the companies that withdrew from bidding, a third company – Jan De Nul from Belgium – only agreed to submit its bid after it was permitted to do so through a company registered in Luxembourg called Ludreco, out of fear of jeopardizing its business in the Arab world.
The government is developing private seaports in Haifa and Ashdod to create competition with costly and inefficient state-owned facilities. Officials, led by Transportation Minister Yisrael Katz, see port reform as a national project that will lower the price of imported goods and the cost of living.
Three other companies also dropped out of the bidding over the last several months – FCC and Cyes, two Spanish companies; and Germany’s Möbius Bau. Those three, however, are believed to have dropped out due to financial problems or because they couldn’t agree to terms with the Israeli partners they were jointly making bids with.
Over the last months, the Israel Ports Company, which is supervising the tender, has scrupulously avoided publicly identifying the companies that had expressed an interest out of political sensitivities. Monday, it declined to officially name any of the bidders.
Sources in the transportation sector said that Israel traditionally had trouble luring global infrastructure companies to participate in major infrastructure projects because so many have major contracts with Saudi Arabia or the Gulf states.
However, they said that some of the companies dropping out for the ports tender have no business interests in the Arab world and acted at a relatively late stage in the bidding process, well after top management had given the go-ahead to compete.
Those developments suggest that political pressure from their home countries were at work in the decision, the sources said.
Finance Minister Yair Lapid related to the boycott issue Monday at the Conference of Presidents of Major American Jewish Organizations in Jerusalem, saying that if current peace talks with the Palestinian collapse, it will be “nothing less than devastating” to the welfare of Israeli citizens.
But Prime Minister Benjamin Netanyahu voiced confidence that world demand for Israeli high-tech know-how would enable Israel to outflank the boycott. “I think it’s important that the boycotters must be exposed for what they are – they’re classical anti-Semites in modern garb. And I think we have to fight them,” Netanyahu said at the conference.
Deutsche Bank, the largest German bank, has included Israel’s Bank Hapoalim on a list of companies who are ethically questionable for investment, Israel’s Walla website reported Monday. The move follows similar ones by Denmark’s Danske Bank and other financial institutions in recent weeks.
After the withdrawal of the majority of foreign companies from the private ports tender, only three groups are left. They are an Israeli joint venture comprising Shapir Engineering and Ashtrom; Ludreco, which has now teamed up with Israel’s Solel Boneh after FCC dropped out; and the Chinese company China Harbour Engineering.
The three groups Monday presented technical proposals and a 60 million shekel ($17 million) bank guarantee. Each of the two proposed ports must be built by a different company, so each of the three bidders submitted bids for both ports to increase their chances of winning.
The finance and transportation ministries have not made a final decision whether to develop two private ports simultaneously or to start by developing Haifa first.